President hoover, in his first annual message to Congress, December 3, 1929, suggested the creation of “a joint commission embracing members of Congress and other appropriate federal officials” to investigate recent developments in the field of group banking and recommend appropriate legislation. He said:

The development of “group” and “chain” banking presents many new problems. The question naturally arises as to whether, if allowed to expand without restraint, these methods would dangerously concentrate control of credit, and whether they would not in any event, seriously threaten one of the fundamentals of the American credit system—which is that credit which is based upon banking deposits should be controlled by persons within those areas which furnish these deposits and thus be subject to the restraints of local interest and public opinion in those areas….

The relinquishment of charters of national banks in great commercial centres in favor of state charters indicates that some conditions surround the national banks which render them unable to compete with state banks; and their withdrawal results in weakening our national banking system. It has been proposed that permission should be granted to national banks to engage in branch banking of a nature that would preserve within limited regions the local responsibility and the control of such credit institutions.